04.03.2008 — The new housing market is slowing down, but integrator Emanuel Gonatos sure isn't.

As president of Ghost Systems Inc., based in Tarpon Springs, Fla, Gonatos is busier than ever, and fitting quite comfortably, in the retrofit market.

He has done a small amount of new construction, but focuses most of his time and attention on the retrofit market.

There has been plenty of demand there for his services, which span home theaters and entertainment centers, home automation, distributed audio systems, motorized window treatments, lighting control, video surveillance, security systems, intercoms and, to a small degree, central vacuum.

"We weren't tied to the new construction as much as our competitors," he says. "There are some who were very heavy into it, and now I see their vans just sitting there."

The way Gonatos sees it, hundreds of thousands of houses don't yet have the technology homeowners crave.



"There are still a lot of people who want the wiring, which is why we're tied so much to retros. If every homeowner in our county wanted two speakers and volume control, I could probably retire," he says.

"It's profitable, and there's a lot of retro work to be done. Yes, it's dirty, nasty work, but it's got to be done and someone's got to do it."

Based on his annual revenues, which continue to grow by some 15 percent per year, Gonatos is profitable at being that someone.

Qualifications for a Retro Focus

Gonatos points out that the difficulty in getting into retrofits is being able to take just the right approach.

"You need to be meticulous, analytical and familiar with construction methods. It requires patience and labor and a 'whatever it takes' attitude to make the job clean," he explains.

Someone who wants to get in and out and make a quick buck will not fare well in this market, he cautions.

"Some competitors give retrofit quotes over the phone and that amazes us. It's just not that simple. Best Buy and Circuit City are tying to cookie-cutter it and it's not working. There are always more charges later."

He explains that when you walk into someone's house, you have to understand how the wall is built, see if there is crown molding and know if there is a plumbing pipe or something else behind a wall that you have to consider so you can quote it properly.

It takes a lot of analysis. You have to be thorough, look at adjacent rooms, know where the sink or tub is located, if the dryer vent is running through a particular wall here, and if it's a 2' x 6' or 2' x 4'.

"We learned a lot early on by making mistakes," he admits.



Ghost Systems doesn't make many mistakes now, judging from its steady and solid growth. Gonatos simplifies things for clients (and their check books) by offering one complete solution.

"You have to handle all aspects because the client doesn't want to go out and find a painter, a carpenter, a drywaller, etc. Even if it's not your specialty, find someone to get it done."

Gonatos maintains a list of two to three subcontractors that do good work in every discipline. "We keep most things in-house to manage quality control and efficiency, except things that require licensed electricians or HVACs."

He stresses the importance of maintaining profitability because sub-contractors are not cheap, and their work is very labor intensive.

"We know how much it costs to bring someone in to remove base boards and crown molding. We have a set labor rate and know how many hours it'll take. Sometimes we win, and sometimes we get hurt," he says.

"Sometimes you run into something you weren't expecting and you have to be prepared to take the hit and not pass it onto the customers unless it's completely insane and out of the ordinary. We deliver what we promise even if it hurts us."